Tuesday, July 9, 2013

Surprising Yourself About Yourself (and, Niceness is Profitable)

I am the most shocked to say that the old chestnut (first published in 1994) Built to Last is my new bible -- and very sincerely I say to you: it IS spiritual.

Did you know that the company Sony, even though it defined itself from the beginning as an electronics/technology company, first made rice cookers, sweetened bean-paste soup, and heating pads?

It's more than fascinating how these 50+ year companies have lasted not because they were the best at maximizing profits and knowing their market better than their competitors or any other "business savvy"-type reason. They seemed to have lasted through the years because they established and continually reinforced certain similar values -- employees and products before stakeholders and profits, research and academic, scientific study over market potential, the best quality and ever-innovative products (even at high financial risk) before lowered standards and/or "safe" copycat products, and an almost mushy emphasis on PEOPLE as their most valued and valuable resource.

The founders of these 18 companies felt a responsibility to their employees at a level never seen before in business. These were the companies that first instituted employee profit-sharing and stockownership, company-wide health insurance and retirement (percentage-based, from janitor to CEO) -- all unprecedented. And nearly all of them instituted this primary responsibility to their employees -- codified it -- in official culture or vision statements which were not just lip-service but really practiced and reinforced at all levels of the company. You can see that their decisions were all aligned with their values, and they never veered.

These company visions were so important to the founders -- to design and establish a workplace structure that prioritized the individuality and contribution of each employee, and encouraged innovation and respect for the creative process -- that most often they were formally written even before a single product had been made. For example, Sony had their philosophy (a passionate document, apparently very lengthy, written in 1945 Japan -- the end of World War II -- by the founder, Masaru Ibuka) codified back when they were making bean-paste soup, way before they were even profitable. Motorola (founded 1928), IBM (1911), 3M (1902), Merck (1891), among others, formalized a philosophy of the company from its formation.

It's a total switcheroo: the product created is the company itself. Products were irrelevant, or at least subservient to the principles and structure of the company. (Marriott started out making root beer at a nine-seat location.) What is also remarkable is that these founding statements, often in their original wording, survived CEO after CEO over decades, because of the strength of belief and their wide-spread indoctrination throughout the institution. (Also, upper management was nearly always promoted from within the company.)

It seems illogical (and definitely un-business-school-like) that any company would put human value and real ethical responsibility over "business"; I never would have believed it. I have never been the tiniest interested in anything business-related, because it seemed coldly calculating all the way to the core. But this rigorous six-year research study at the Stanford GSB (Graduate School of Business) -- Thank you, Jim Collins and Jerry Porras! -- proves the connection between commitment to the highest human ideals and market leadership and success. They held to their own standards, weathering some very hard periods of history and turns in the market. Reading their founding documents, it's amazing how idealism and ethical responsibility really were chief in their motivations for starting a company. You'd think it would be seen cynically, like Yeah sure, ethics and responsibility wins out over maximum profits? It's hard to believe, and there's a natural skepticism about companies as only profit-driven. "Corporation" is now pretty much synonymous with "Corruption"-- a cold and cruel, morally bankrupt pursuit of money and power. However, in the case of these 18 companies at least, their ideologies of values and purposefulness (to all humans) are really not meaningless platitudes.

Now everyone hears and reads of all the B.S.-y "vision statements" and "values" that companies tout, and I was the first to scoff and be cynical. I read this one company's statement of values -- pure nuggets about humility, integrity, authenticity -- then thought of the company's snobby founders and almost threw up from the insincerity. But this book made me believe again. Maybe I'm naïve, but it renewed my "youthful idealism" (see how cynical I still am, putting in quotes!). It's just so GENIUS that this proof exists! For me, it's like officially finding out that actions matter, intentions matter, that we are meant for more than surviving and getting by. Of course I can't hang out that long in this idealistic bubble, I know that some of these companies have veered off course a bit (or completely), but the pure long-term sustainment of vision (decades!) is commendable, admirable, and makes me stretch my own idea of what human capacity really can be. Caring about people and being competitive are not mutually exclusive.

Because we didn't have fear, we could do something drastic. Masaru Ibuka, Founder of Sony Corporation, 1991

1 comment:

Interesting. I would never see you sitting around reading about all of this, but it sounds very humanistic and life affirming to see that business, i.e. work/commerce/etc. isn't all bad. Maybe you're giving me hope too!